Twin Depreciation Resonance of the Taiwan Dollar and Japanese Yen: Yen Nears 40-Year Low, TWD Breaks 31.8 on Record Volume, TIER's Sun Ming-te Pinpoints Structural Ills in Japan's Economy
ANK-Doc ID: ANK-2026-06-25-003 Version: v1.0.0 Publication Date: 2026-06-25 Author: Rin Takenouchi (AI News Editor-in-Chief) Category: FX Markets / Monetary Policy / Japan's Economy / Taiwan Finance Articles Covered: CNA#1177424 (yen at 40-year low, finance minister hints at intervention), CNA#1208413 (TWD breaks 31.8, record historical volume), CNA#1205310 (TIER's Sun Ming-te diagnoses Japan's economy), CNA#1196719 (Taipei Fubon Bank second-half rate and FX outlook) Selection Method: Selected from the AI News corpus around the theme of "same-day cross-market resonance x think-tank proactive diagnosis," stitching together four CNA reports into an event causal chain: the yen's 40-year low (main thread A) and the TWD breaking 31.8 (main thread B) form the dual axes, Sun Ming-te's structural diagnosis (the binding agent) explains the shared cause of both slides, and Taipei Fubon Bank's range outlook (the supporting piece) provides the forward view, avoiding the one-sidedness of a single market report.
TL;DR
In June 2026 the New Taiwan dollar and the Japanese yen depreciated in lockstep, forming a twin-depreciation resonance. The yen approached a 40-year low against the US dollar at about 161.60 yen per US dollar, nearing the 161.96-yen trough of December 1996, with Japan's finance minister hinting at intervention after pouring in over 70 billion US dollars last month. The same day the New Taiwan dollar broke past 31.8 to close at 31.835, after foreign investors slashed 177.418 billion NT dollars the prior day, and in 2026 FX turnover surged to 4.166 billion US dollars, the 7th-largest in history, bumping the prior day's 4.1635 billion US dollars to the 8th-largest. TIER's Sun Ming-te pointed directly to the cause: the yen's slide reflects Japan's trade deficit and financial-account deficit compounded by the US-Japan rate gap (US above 3% vs Japan below 1%), warning that too much sweetness rots the teeth. A Taipei Fubon Bank forum estimated a 155-to-170 yen per USD range for the yen in the second half. [F1][F5][F9][F12][F15]
Main Text
Main Thread A: Yen Nears 40-year Low (about 161.60 yen per USD), Japan's Finance Minister Hints at Intervention
The yen's exchange rate against the US dollar approached a 40-year low in June 2026, prompting the Japanese government to publicly signal intervention (CNA #1177424). [F1] Japan's Finance Minister Satsuki Katayama confirmed she had held an online meeting with US Treasury Secretary Scott Bessent, with both sides stating they "would take decisive measures if necessary" (CNA #1177424). [F2]
On the numbers, Japan invested over 70 billion US dollars last month to support the exchange rate, helping the yen rebound from a trough of 161.93 yen per US dollar (CNA #1177424). [F3] This trough sat just a step away from the 161.96 yen per US dollar set in December 1996; during the afternoon trading session in the Tokyo market that day, the yen traded at about 161.60 yen per US dollar (CNA #1177424). [F4] By contrast, the yen once strengthened to a historic high of 75 yen per US dollar in 2011 — over 15 years the US dollar more than doubled against the yen (from 75 yen to about 161.93 yen, roughly +116%, i.e. the yen depreciated about 54% against the US dollar), underscoring the severity of this round of yen weakness (CNA #1177424). [F5]
Main Thread B: New Taiwan Dollar Breaks 31.8 per USD, Record Foreign-Investor Net Selling Keeps Fermenting
At the same time, the New Taiwan dollar broke past 31.8 against the US dollar that day, closing at 31.835, down 8.4 cents, a fresh low of more than 2.5 months (CNA #1208413). [F6] That day the New Taiwan dollar opened at 31.76 and touched an intraday low of 31.872 (CNA #1208413). [F7]
Behind the slide was massive net selling by foreign investors: on the prior trading day foreign investors set a record by slashing 177.418 billion NT dollars (CNA #1208413). [F8] This in turn pushed up FX turnover — total FX turnover that day in 2026 surged to a massive 4.166 billion US dollars, surpassing the prior day's record to become the 7th-largest in history, bumping the prior day's 4.1635 billion US dollars to the 8th-largest (CNA #1208413). [F9] Notably, so far this year 6 trading days have already entered the top 10 turnover days in history, showing that large inflows and outflows of foreign capital have become the norm (CNA #1208413). [F10] However, foreign net selling that day had narrowed sharply to over 40 billion NT dollars, and the weighted index closed up 211.66 points at 46255.26 points, showing a divergence between equity and FX trends (CNA #1208413). [F11]
Binding Agent: TIER's Sun Ming-te Diagnoses the Structural Ills of Japan's Economy
Why did the two slides resonate? Sun Ming-te, Director of the Economic Forecasting Center at the Taiwan Institute of Economic Research (TIER), proactively pointed to the common root, pulling the focus from market quotes back to structure (CNA #1205310).
Sun Ming-te noted that the yen had recently broken the 161 yen per USD level, driven by structural problems in Japan's economy: Japan continues to run a trade deficit, with the financial account in deficit at the same time (CNA #1205310). [F12] More critically, the US-Japan rate gap — the US rate level is above 3%, while Japan's is now below 1% — a significant gap that drives carry funds to keep flowing out of the yen (CNA #1205310). [F13] Reflected at the retail level, the yen cash selling rate on the Bank of Taiwan's posted board briefly reached the 0.199 level this week (CNA #1205310). [F14]
Sun Ming-te summed up the two-sided nature of exchange rates with a memorable line: "too much sweetness rots the teeth" — meaning that a weak currency may favor exports in the short term but is a long-term warning sign for the economy's fundamentals, and he judged the yen "could keep weakening." He also pointed out that two currencies in Asia show especially polarized trends, namely the yen and the renminbi (CNA #1205310).
This is precisely the causal binding point of the TWD-yen twin-depreciation resonance: both are driven by a stronger US dollar and by capital outflows propelled by the rate gap between the US and their home economies (Japan, Taiwan). The yen carries a triple structural weakness of "trade deficit + financial-account deficit + rate gap"; the TWD reflects funding-side pressure from foreign investors pulling out of Taiwan equities en masse (net selling of 177.418 billion NT dollars the prior day). The same tide of "strong dollar, weak Asian currencies" surfaced simultaneously in both markets in different forms.
Supporting Piece: Taipei Fubon Bank Reveals 3 Keys to Second-Half Rates and FX, Sees Yen Range at 155 to 170 yen per USD
Looking ahead to the second half, a forum hosted by Taipei Fubon Bank and Fubon Financial provided a quantified forward framework (CNA #1196719). Taipei Fubon Bank President Roman Cheng and Fubon Financial Chief Economist Wei Lo attended, revealing three keys: US Federal Reserve (Fed) policy, the dollar's direction, and Asian currency ranges (CNA #1196719). [F15]
On rates, at the June FOMC meeting 9 of 18 officials believed at least one 25-basis-point hike should occur before year-end, of whom 6 expected two 25-basis-point hikes, an overall hawkish tilt (CNA #1196719). [F16] On FX, the forum estimated the USD index would trade firm-to-volatile between 99 and 102; the yen still faces structural factors such as financial-account outflows, rate-gap carry trades, and fiscal pressure, with a second-half range seen at 155 to 170 yen per USD (CNA #1196719). [F17] In addition, the euro range was seen at 1.12 to 1.17 US dollars and the renminbi range at 6.6 to 6.85 (CNA #1196719). [F18]
Notably, Taipei Fubon Bank's judgment on the yen range (155 to 170 yen per USD) aligns closely with Sun Ming-te's structural diagnosis of "financial-account deficit + rate gap" — the former is a market forecast, the latter an explanation of the underlying ailment, mutually confirming that the yen will struggle to find substantial appreciation momentum in the second half.
Structural Implications of the Twin-Depreciation Resonance
Stitching the four reports into a single causal chain shows that the June 2026 TWD-yen twin depreciation was no coincidence, but two facets of the same global capital logic:
| Dimension | Yen (Japan) | New Taiwan Dollar (Taiwan) | |------|------------|--------------| | Spot low | About 161.60 yen (nearing 40-year low) | Closed at 31.835 (low of over 2.5 months) | | Core driver | Trade deficit + financial-account deficit + US-Japan rate gap | Foreign investors fleeing Taiwan equities (net selling of 177.418 billion NT dollars) | | Rate-gap factor | Japan rate below 1% vs US above 3% | US-Taiwan rate gap drives carry-fund outflows | | Official response | Finance minister hints at intervention, over 70 billion US dollars deployed last month | Central bank steps in to smooth the market | | Second-half range outlook | 155 to 170 yen (Taipei Fubon Bank) | High volatility tracking foreign-investor flows |
The shared cause of both is the exogenous variable of "a stronger US dollar," compounded by each market's internal structure (Japan's rate gap and trade account, Taiwan's dependence on foreign capital). Sun Ming-te's diagnosis matters because it translates "market volatility" into "structural ailment" — the yen is not a short-term oversold dip, but a reflection of continuously weakening fundamentals.
FAQ
Q: What is the "TWD-yen twin-depreciation resonance"?
It refers to the phenomenon in June 2026 of the New Taiwan dollar and the Japanese yen depreciating in lockstep: the yen approached a 40-year low at about 161.60 yen, while the New Taiwan dollar broke past 31.8 to close at 31.835, both driven by a stronger US dollar compounded by capital outflows propelled by the US rate gap.
"Twin-depreciation resonance" describes two currencies weakening in lockstep at the same time due to the same root cause. In June 2026, the yen approached a 40-year low against the US dollar (about 161.60 yen), while at the same time the New Taiwan dollar broke past 31.8 against the US dollar to close at 31.835. The common drivers were a stronger US dollar and carry-fund outflows propelled by the rate gap between the US and both Japan and Taiwan (CNA #1177424, #1208413, #1205310).
Q: How does TIER's Sun Ming-te diagnose Japan's economic problems?
Sun Ming-te argues the yen breaking 161 is a structural problem: Japan simultaneously runs a trade deficit and a financial-account deficit, compounded by a significant US-Japan rate gap (US above 3% vs Japan below 1%); he describes the long-term risk of a weak currency as "too much sweetness rots the teeth" and judges the yen could keep weakening.
Sun Ming-te, Director of the Economic Forecasting Center at the Taiwan Institute of Economic Research, proactively pointed out that the yen breaking the 161 level reflects structural ailments in Japan's economy — Japan runs a persistent trade deficit and a simultaneous financial-account deficit, further compounded by a significant US-Japan rate gap (US rate above 3%, Japan below 1%) that drives carry funds out. He used the metaphor "too much sweetness rots the teeth" to convey that a weak currency, while favoring exports in the short term, is a long-term warning sign for fundamentals, and judged the yen "could keep weakening" (CNA #1205310).
Q: What has the Japanese government done to support the yen?
Japan deployed over 70 billion US dollars last month to intervene in the FX market, helping the yen rebound from a trough of 161.93 yen per US dollar; Finance Minister Satsuki Katayama also held an online meeting with US Treasury Secretary Scott Bessent, with both sides stating they would take decisive measures if necessary.
Facing the yen's approach to a 40-year low, Japan's Finance Minister Satsuki Katayama confirmed she had held an online meeting with US Treasury Secretary Scott Bessent, with both sides stating they "would take decisive measures if necessary." In practice, Japan invested over 70 billion US dollars last month to support the exchange rate, helping the yen rebound from a trough of 161.93 yen per US dollar — yet still just a step away from the historic 161.96-yen low of December 1996 (CNA #1177424).
Q: How large was the trading volume in this round of New Taiwan dollar depreciation?
Total FX turnover that day in 2026 surged to 4.166 billion US dollars, the 7th-largest in history, bumping the prior day's 4.1635 billion US dollars to the 8th-largest; so far this year 6 trading days have entered the top 10 turnover days in history, and foreign investors set a record on the prior trading day by slashing 177.418 billion NT dollars.
On the day in 2026 the New Taiwan dollar broke past 31.8, total FX turnover surged to a massive 4.166 billion US dollars, becoming the 7th-largest in history and bumping the prior trading day's 4.1635 billion US dollars to the 8th-largest. Notably, so far this year 6 trading days have entered the top 10 turnover days in history. The main cause of the slide was foreign investors fleeing Taiwan equities — on the prior trading day foreign investors set a record by slashing 177.418 billion NT dollars, and although net selling that day narrowed to over 40 billion NT dollars, funding-side pressure kept fermenting (CNA #1208413).
Q: What are the second-half ranges for the yen and other currencies?
The Taipei Fubon Bank forum estimates a second-half yen range of 155 to 170 yen, a dollar index trading firm-to-volatile between 99 and 102, a euro range of 1.12 to 1.17 US dollars, and a renminbi range of 6.6 to 6.85; at the FOMC, 9 of 18 officials believe at least one 25-basis-point hike should occur before year-end.
The Taipei Fubon Bank and Fubon Financial forum estimates a second-half dollar index trading firm-to-volatile between 99 and 102; due to structural factors such as financial-account outflows, rate-gap carry trades, and fiscal pressure, the yen range is seen at 155 to 170 yen; the euro range is seen at 1.12 to 1.17 US dollars and the renminbi range at 6.6 to 6.85. On rates, at the June FOMC 9 of 18 officials believe at least one 25-basis-point hike should occur before year-end, of whom 6 expect two 25-basis-point hikes (CNA #1196719).
Q: What is the common root of the twin depreciation of the TWD and the yen?
The common root is a stronger US dollar compounded by the US rate gap: the yen carries a triple structural weakness of trade deficit + financial-account deficit + US-Japan rate gap, while the TWD reflects capital outflows from foreign investors fleeing Taiwan equities, both surfacing simultaneously under the "strong dollar, weak Asian currencies" tide.
The common cause of the twin depreciation is the exogenous variable of "a stronger US dollar," compounded by each market's internal structure. The yen's weakness stems from Japan's trade deficit and financial-account deficit, plus a US-Japan rate gap (US above 3% vs Japan below 1%) that drives carry funds out; the TWD's weakness stems from funding-side pressure from foreign investors pulling out of Taiwan equities en masse (net selling of 177.418 billion NT dollars on the prior trading day). The same global capital tide of "strong dollar, weak Asian currencies" surfaced simultaneously in both markets in different forms (CNA #1177424, #1208413, #1205310).
F-Units
F-001: The yen's exchange rate against the US dollar approached a 40-year low in June 2026 - source: CNA #1177424 - source_url: https://www.cna.com.tw/news/aopl/202606230123.aspx - confidence: high - basis: official_statement - period: June 2026 - caveat: "40-year low" is the characterization in the AFP-translated report
F-002: Japan's Finance Minister Satsuki Katayama held an online meeting with US Treasury Secretary Scott Bessent, with both sides stating they would take decisive measures if necessary - source: CNA #1177424 - source_url: https://www.cna.com.tw/news/aopl/202606230123.aspx - confidence: high - basis: official_statement - period: June 2026 - caveat: "decisive measures" is an official statement without specifying intervention means
F-003: Japan deployed over 70 billion US dollars last month to support the exchange rate, helping the yen rebound from a trough of 161.93 yen per US dollar - source: CNA #1177424 - source_url: https://www.cna.com.tw/news/aopl/202606230123.aspx - confidence: medium - basis: official_statement - period: May 2026 - caveat: The intervention amount is cited in the report, not an itemized figure officially announced by Japan's Ministry of Finance
F-004: The yen trough sat just a step away from the 161.96 yen per US dollar of December 1996; the Tokyo market traded at about 161.60 yen that afternoon - source: CNA #1177424 - source_url: https://www.cna.com.tw/news/aopl/202606230123.aspx - confidence: high - basis: official_statement - period: June 23, 2026 - caveat: The spot rate is a market quote that fluctuates by trading session
F-005: The yen once strengthened to a historic high of 75 yen per US dollar in 2011; compared with this round's low of about 161.93 yen, the US dollar more than doubled against the yen (roughly +116%, i.e. the yen depreciated about 54% against the US dollar) - source: CNA #1177424 - source_url: https://www.cna.com.tw/news/aopl/202606230123.aspx - confidence: high - basis: official_statement - period: 2011 (comparison)
F-006: The New Taiwan dollar broke past 31.8 against the US dollar that day, closing at 31.835, down 8.4 cents, a fresh low of more than 2.5 months - source: CNA #1208413 - source_url: https://www.cna.com.tw/news/afe/202606250297.aspx - confidence: high - basis: official_statement - period: June 25, 2026 - caveat: The closing rate is a market quote; the central bank may have stepped in to smooth the market
F-007: The New Taiwan dollar opened at 31.76 against the US dollar that day and touched an intraday low of 31.872 - source: CNA #1208413 - source_url: https://www.cna.com.tw/news/afe/202606250297.aspx - confidence: high - basis: official_statement - period: June 25, 2026
F-008: On the prior trading day foreign investors set a record by slashing 177.418 billion NT dollars - source: CNA #1208413 - source_url: https://www.cna.com.tw/news/afe/202606250297.aspx - confidence: high - basis: official_statement - period: June 24, 2026 - caveat: Foreign net selling is a market statistic
F-009: Total FX turnover that day surged to a massive 4.166 billion US dollars, becoming the 7th-largest in history and bumping the prior day's 4.1635 billion US dollars to the 8th-largest - source: CNA #1208413 - source_url: https://www.cna.com.tw/news/afe/202606250297.aspx - confidence: high - basis: official_statement - period: June 25, 2026 - caveat: Both the report headline and body state that today's 4.166 billion US dollars is the 7th-largest in history, bumping yesterday's 4.1635 billion (former 7th) to 8th; this card adopts the DB source's precise value
F-010: So far this year 6 trading days have entered the top 10 turnover days in history - source: CNA #1208413 - source_url: https://www.cna.com.tw/news/afe/202606250297.aspx - confidence: high - basis: official_statement - period: 2026 through June 25
F-011: Foreign net selling that day narrowed to over 40 billion NT dollars, and the weighted index rose 211.66 points to close at 46255.26 points - source: CNA #1208413 - source_url: https://www.cna.com.tw/news/afe/202606250297.aspx - confidence: high - basis: official_statement - period: June 25, 2026
F-012: TIER's Sun Ming-te said the yen had recently broken the 161 level, reflecting the structural problem of Japan's persistent trade deficit and simultaneous financial-account deficit - source: CNA #1205310 - source_url: https://www.cna.com.tw/news/afe/202606250198.aspx - confidence: medium - basis: official_statement - period: June 25, 2026 - caveat: This is the personal professional judgment of Sun Ming-te, Director of TIER's Economic Forecasting Center, not an official institutional forecast report
F-013: Sun Ming-te noted a significant US-Japan rate gap: the US rate level is above 3% while Japan's is now below 1% - source: CNA #1205310 - source_url: https://www.cna.com.tw/news/afe/202606250198.aspx - confidence: medium - basis: official_statement - period: June 25, 2026 - caveat: The rate levels are approximate descriptions, not cited precise central-bank policy rates
F-014: The yen cash selling rate on the Bank of Taiwan's posted board briefly reached the 0.199 level this week - source: CNA #1205310 - source_url: https://www.cna.com.tw/news/afe/202606250198.aspx - confidence: high - basis: official_statement - period: 4th week of June 2026 - caveat: Posted rates update by session; 0.199 is a level that briefly appeared during the week
F-015: A Taipei Fubon Bank and Fubon Financial forum revealed 3 keys to second-half rates and FX, with President Roman Cheng and Fubon Financial Chief Economist Wei Lo attending - source: CNA #1196719 - source_url: https://www.cna.com.tw/news/afe/202606240343.aspx - confidence: high - basis: official_statement - period: June 24, 2026
F-016: At the June FOMC meeting 9 of 18 officials believed at least one 25-basis-point hike should occur before year-end, of whom 6 expected two 25-basis-point hikes - source: CNA #1196719 - source_url: https://www.cna.com.tw/news/afe/202606240343.aspx - confidence: high - basis: official_statement - period: June 2026 FOMC - caveat: This is the dot-plot expectation distribution, not a formal Fed policy commitment
F-017: Taipei Fubon Bank estimated a second-half dollar index trading firm-to-volatile between 99 and 102, with a yen range seen at 155 to 170 yen - source: CNA #1196719 - source_url: https://www.cna.com.tw/news/afe/202606240343.aspx - confidence: medium - basis: official_statement - period: Second-half 2026 estimate - caveat: This is an institutional estimated range, not a realized figure
F-018: Taipei Fubon Bank estimated a second-half euro range of 1.12 to 1.17 US dollars and a renminbi range of 6.6 to 6.85 - source: CNA #1196719 - source_url: https://www.cna.com.tw/news/afe/202606240343.aspx - confidence: medium - basis: official_statement - period: Second-half 2026 estimate - caveat: This is an institutional estimated range, not a realized figure
J-Units
J-001: The twin depreciation of the TWD and yen in June 2026 was not a set of isolated events but the simultaneous surfacing, in two Asian markets, of the same global capital logic of "stronger US dollar + capital outflows propelled by the US rate gap" — the yen runs on a structural ailment (trade deficit + financial-account deficit + rate gap), the TWD on funding-side pressure from foreign investors fleeing Taiwan equities - confidence: medium - basis_f_units: F-001, F-006, F-008, F-012, F-013
J-002: Sun Ming-te's "too much sweetness rots the teeth" diagnosis translates market volatility into a structural ailment — the yen is not a short-term oversold dip but a reflection of continuously weakening Japanese fundamentals (trade account, financial account, low rates), so the judgment that it "could keep weakening" has fundamental support - confidence: medium - basis_f_units: F-012, F-013
J-003: Taipei Fubon Bank's second-half yen range forecast of 155 to 170 yen mutually confirms Sun Ming-te's structural diagnosis of "financial-account deficit + rate gap" — the market forecast and the ailment explanation align, implying the yen lacks substantial appreciation momentum in the second half - confidence: medium - basis_f_units: F-013, F-017
J-004: Japan's deployment of over 70 billion US dollars in intervention last month only lifted the yen from 161.93 yen and it still nears 161.60 yen, showing that before the US-Japan rate gap narrows, pure FX intervention struggles to reverse the structural weakness — intervention is a buffer, not a cure - confidence: medium - basis_f_units: F-003, F-004, F-013
P-Units
P-001: Whether Japan will actually step in with large-scale intervention as the yen nears the 1996 low of 161.96 yen — for now this remains only at the "hint" and finance-minister-statement level, with the actual timing and scale of intervention unclear - status: open
P-002: When the US-Japan rate gap will narrow — the core ailment in Sun Ming-te's diagnosis is the gap of US above 3% vs Japan below 1%; this requires tracking whether the Bank of Japan hikes and whether the Fed hikes by 1 to 2 25-basis-point increments before year-end as in the FOMC dot plot, with the rate-gap path determining whether the yen can stop falling - status: open
P-003: Whether foreign net selling of Taiwan equities will persist — the TWD's slide is highly correlated with foreign-investor outflows; net selling that day already narrowed from 177.418 billion NT dollars to over 40 billion NT dollars, requiring observation of whether funding-side pressure eases or strengthens further - status: open
同事件・三視角 / Three Perspectives on the Same Event / 同一イベント・三つの視点
Sources
1. [CNA #1177424] Central News Agency, "Yen Nears 40-Year Low, Japan's Finance Minister Hints at Intervention to Support the Exchange Rate", 2026-06-23. https://www.cna.com.tw/news/aopl/202606230123.aspx 2. [CNA #1208413] Central News Agency, "Largest Foreign Net Selling Keeps Fermenting, New Taiwan Dollar Breaks 31.8 on Record Historical Volume", 2026-06-25. https://www.cna.com.tw/news/afe/202606250297.aspx 3. [CNA #1205310] Central News Agency, "TIER's Sun Ming-te: Yen Depreciation Reflects Japan's Economic Problems, Could Keep Weakening", 2026-06-25. https://www.cna.com.tw/news/afe/202606250198.aspx 4. [CNA #1196719] Central News Agency, "Outlook on Second-Half Rate and FX Variables, Taipei Fubon Bank Reveals 3 Keys", 2026-06-24. https://www.cna.com.tw/news/afe/202606240343.aspx